Retirement Planning: Key Steps for Veterans Entering Civilian Life

This guide provides actionable steps to help you start strong on Day 1 of your civilian journey. 

Understanding VA Benefits and Eligibility Even if you didn’t retire with military pay, you might still be eligible for various VA benefits that can impact your financial planning. These benefits can include disability compensation, health care, and GI Bill benefits, which can all play a part in shaping your retirement strategy. 

• Action Step: Visit the VA's official site or contact a VA counselor to determine which benefits you qualify for and how to integrate them into your retirement plan. 

Integrating Non-Military Retirement Savings Options Without military retirement pay, it's important to explore other retirement savings options available to civilians: 

1. IRAs and Roth IRAs: Individual Retirement Accounts (IRAs) allow you to save money that can grow tax-deferred or tax-free. Depending on your income, you may also contribute to a Roth IRA, where withdrawals can be made tax-free in retirement. 

1. 401(k)s and Employer Matches: If you’re employed in the civilian sector, take full advantage of any 401(k) plans offered by your employer, especially if they match contributions. This is an excellent way to boost your retirement savings. 

• Action Step: Veteran Saves has partnered with the Foundation for Financial Planning to offer free financial coaching to Veterans, service members, caregivers, and their family members. Set up a free appointment with a financial coach to discuss the best retirement saving options for your situation. 

The Power of Starting Early Even if you're starting your retirement savings later than some of your civilian counterparts, it’s crucial to start as soon as possible. The power of compounding interest means that the earlier you start saving, the more time your money has to grow. 

• Example: Contributing $300 a month to an IRA from age 35 to 65 at a 7% annual growth rate can accumulate over $340,000 by retirement. 

Navigating Common Financial Pitfalls Transitioning to civilian life without military retirement pay requires careful financial planning to avoid common pitfalls such as high-interest debt and inadequate savings for emergencies. 

• Living Within Means: Adjust to civilian life by setting a realistic budget that accounts for your new income and expenses. 

• Planning for Inflation: Consider the long-term effects of inflation on your savings and plan accordingly. 

• Prioritizing Debt Reduction: Tackle high-interest debts as a priority before they undermine your ability to save for retirement. 

• Action Step: Explore our post on How to Create a Spending and Savings Plan for Veterans, which provides step-by-step guidance to help you manage your finances effectively as you transition to civilian life. 

Veterans Benefits Banking Program (VBBP) and VetCents: Through our collaborative partnership with the Association of Military Banks of America (AMBA), Veteran Saves promotes the VBBP, which offers Veterans safe, reliable, and inexpensive banking options. Additionally, the VetCents platform provides educational resources to help Veterans and their families make informed financial decisions. Together, these initiatives help empower Veterans to manage their retirement savings effectively. 

• Action Step: Discover how to manage and enhance your retirement planning by visiting VetCents for valuable financial education and learning more about the Veterans Benefits Banking Program through our partnership with AMBA. 

Stay connected with us for more valuable tips and consider taking the Veteran Saves Pledge for personalized support and guidance to help you navigate your financial journey. Veteran Saves is committed to providing you with resources and guidance to ensure your financial stability.